A high-technology group associated with Hollywood has dropped a long-running lawsuit against a California programmer it accused of putting DVD-cracking code online, attorneys for both sides said Thursday.

The DVD Copy Control Association (DVD CCA) has asked California state courts to dismiss its case against programmer Andrew Bunner. The group sued Bunner and a long list of other Web publishers four years ago, alleging that the act of posting code called DeCSS, which can help in the process of decoding and copying DVDs, violated its trade secret rights.

The trade group's decision marks the close of the last prominent legal battle over the DeCSS code. Despite the DVD CCA's move, one federal appeals court ruling in New York found it is illegal to distribute the code in the United States.

Nevertheless, Bunner's attorneys called the unexpected decision by the DVD CCA to drop its case a victory for free speech.

"I think that they are sick of losing," said Allonn Levy, one of several attorneys who had worked on the case on Bunner's behalf. "I think they have finally reached the conclusion that it is not a fight that they can win."

Attorneys for the DVD CCA could not immediately be reached. In a statement, they said the group is "evolving" its legal strategies based on other court decisions, and that the California state trade secrets case was no longer necessary.

"The trade secrets case, together with (other) litigation, set important precedents and sent important messages," Robert Sugarman, the DVD CCA's lead attorney and a partner at Weil, Gotshal & Manges, said in the statement. "The owners of trade secrets will not stand by and allow their property to be misappropriated without action, and the rulings of the courts have shown protection of intellectual property is an important priority for the legal system."

Although the unceremonious close to the case will have little impact on the online availability of the controversial DVD software, Bunner's fight has been a closely watched test of how much freedom individuals have to distribute software online that runs against corporate or other powerful interests--or even violates a law.

Bunner's attorneys had sought broad First Amendment free-speech protections for posting software code online, while the DVD CCA had argued that speech rights did not cover trade secrets.

An appeals court ruled in favor of Bunner, affording software the highest protection available. But that verdict concerned Silicon Valley companies, which worried that it would provide a shield in cases such as disgruntled employees posting a company's private source code online for competitors to read.

"The appeals court ruled that you couldn't have a preliminary injunction (blocking online posting of code) in a trade secrets case that involved software," said Jonathan Band, an intellectual-property attorney with Morrison & Foerster. "That was a very odd decision...and was extremely problematic for (the) software industry."

Hollywood's four-year fight
The DVD CCA decision follows a series of setbacks for Hollywood in attempting to control the spread of DeCSS code and other DVD-copying tools.

Written by Norwegian teenager Jon Johansen, the code was initially aimed at letting Linux-based computers play DVDs. However, the code became widely distributed as a means for breaking through, or decrypting, the Content Scrambling System, an anticopying technology the DVD CCA created that most DVDs use.

Norwegian courts ruled last month for a second time that Johansen did not break that country's laws in releasing the DeCSS code online.

Hollywood studios have fought a long-running battle against distributors of the code in the United States, however. Soon after the DeCSS software emerged, studios sued a number of Web publishers in federal court, arguing that Johansen's software violated provisions of the Digital Millennium Copyright Act.

At the same time, the DVD CCA took Bunner and other publishers to court in California, saying their publication of the DeCSS code violated the technology group's rights to keep the CSS code a trade secret. Most of those defendants also declined to fight the lawsuit.

The ruling in the Corley case ultimately made the California case redundant, since the code was already illegal to distribute, attorneys said. If it had pursued its case further, the DVD CCA would have also risked prompting a ruling against it, since the California Supreme Court had expressed skepticism in its last ruling that there were any trade secrets to protect.

In its statement Thursday, the DVD CCA said it will pursue other avenues in protecting its code, including possibly filing patent infringement suits. It also said several outstanding Hollywood cases against commercial publishers that offer DVD-copying software will help protect its rights.